Shein Accelerates India Manufacturing Push Amid US-China Trade Tensions
Fast fashion giant Shein is reportedly preparing to significantly expand its manufacturing operations in India as global trade dynamics shift and supply chain diversification becomes crucial. The Singapore-headquartered company, originally founded in China, is strategically positioning itself to navigate ongoing trade tensions while strengthening its international supply chains.
Massive Supplier Expansion Plans
According to industry sources, Shein and its Indian partner Reliance Retail are planning an ambitious expansion of their supplier network in India. The companies aim to increase their Indian supplier base from the current 150 suppliers to 1,000 suppliers within a year, representing a nearly seven-fold increase in manufacturing capacity.
The expansion plans include beginning international sales of India-manufactured Shein clothing within the next six to 12 months. This strategic move would diversify Shein's production away from its traditional China-centric manufacturing model and create new revenue streams through India-based operations.
Strategic Response to Trade Challenges
The timing of this expansion appears closely linked to escalating trade tensions between the United States and China. Industry analysts suggest that Shein's India manufacturing push represents a proactive response to potential future tariffs and the closure of certain trade loopholes that have previously benefited Chinese manufacturers.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, described the move as strategically sound given the trade headwinds facing the company. The expansion allows Shein to potentially benefit from lower 10% tariffs on Indian exports to the US, compared to higher tariffs on Chinese goods.
Partnership with Reliance Retail
Shein's Indian operations are built on a licensing partnership with Reliance Retail, part of the conglomerate owned by Asia's richest person, Mukesh Ambani. This collaboration represents one of many strategic partnerships Reliance has established with global clothing brands, including Brooks Brothers, Marks & Spencer, and Diesel.
Under the current arrangement, Shein-branded clothing is produced domestically in India and sold through the SheinIndia.in website. This differs significantly from most other Shein websites, which primarily feature products manufactured in China.
Historical Context of Shein's India Journey
Shein's relationship with India has experienced significant ups and downs. The company first launched in India in 2018 but was subsequently banned in 2020 as part of a government crackdown on Chinese firms amid border tensions.
The company made its comeback in February 2025 through the licensing deal with Reliance Industries. This partnership allows Shein to re-enter the Indian market while complying with local regulations and benefiting from Reliance's extensive retail network and manufacturing expertise.
Broader Industry Trend Toward India Manufacturing
Shein's expansion aligns with a broader trend of global companies diversifying their manufacturing bases to India. Technology giant Apple has also been significantly boosting its production in India, with plans to manufacture approximately 25% of global iPhones in the country in the coming years.
This shift reflects companies' strategic responses to evolving trade policies and the need for supply chain resilience. India's textile and garment export industry stands to benefit significantly from this manufacturing migration, potentially creating substantial employment opportunities and technology transfer.
Challenges and Considerations
While the expansion presents significant opportunities, industry experts note several challenges. Ed Sander, analyst at Tech Buzz China, pointed out current limitations around India's factory capacity, suggesting that export-focused manufacturing may not be immediately achievable at scale.
Additionally, concerns about labor practices in textile manufacturing persist across various markets, including India. Responsible consumers and investors continue to scrutinize supply chain practices, particularly regarding labor conditions and sustainability standards.
Impact on Shein's IPO Plans
The India manufacturing expansion comes at a crucial time for Shein as the company pursues its initial public offering. The e-commerce giant recently shifted its listing plans from London to Hong Kong after encountering regulatory challenges.
Diversifying manufacturing operations and reducing dependence on Chinese production could help address some investor concerns about supply chain risks and geopolitical exposure. This strategic positioning may strengthen Shein's appeal to international investors ahead of its public listing.
The expansion represents a significant evolution in Shein's business model, potentially transforming it from a primarily China-based manufacturer to a truly global production network. Success in India could serve as a template for similar expansions in other markets, further strengthening the company's international competitiveness.
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